November 23, 2009

3 postive & negative developments in the last decade in India

What are the 3 positive and negative developments to have occured in the last decade in India?

Shri Subir Gokarn, who has just become the Deputy Governor of the Reserve Bank of India, lists the following in his column in today's Business Standard:

Postive developments:
1. Massive increase in the economy's capacity to absorb shocks without significant disruptions
2. Economic activity and performance becoming less dependent on political outcomes and stability
3. Increase in the scope, depth and innovativeness of private enterprise across the board

Negative developments:
1. Slow rate at which the middle class is expanding
2. Failure of the Indian economy to act as an engine of growth and development within the South Asian region
3. Growing mismatch between the demands being made on the state and its capacity, in every sense of the term, to deliver on them

(Read the entire article at http://www.business-standard.com/india/news/subit-gokarn-in-conclusion/377252/ )

a) What would you list as the 3 positive and negative developments in India in the last decade?

b) What are your responses to the above? Read one counterview below that we have received.

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For an average person like me, they seem to reflect a limited world where people only look at numbers and balance sheets and focus on how they can tweak or improve these numbers. An entire world of other issues and concerns are not reflected in such thinking, and, unfortunately, do not get included, as these would then contradict such views.

These are my counter-points to Shri Gokarn's points.

on the Postive developments

1. This can be a positive development if we say that society can absorb shocks without disruptions or pain - this has not happened; the economic downturn caused lots of lay-offs, shut-downs, etc. - the economy didn't suffer, people suffered a lot

2. How we make money is more important than how much money we make, and hence the politics of a place (for e.g. Gujarat with it's human rights violations or Orissa with its resource-exploitative policies) is closely linked to its economic activity. To say that politics and stability doesn't affect economic activity actually says that as a society we don't care about what is happening around us, as long as we have cash in our hands.

3. Private enterprise largely thinks for itself, it is unhampered by thoughts for any others, such as the poor, or the environment, and it shoves these aside. Therefore it has to flourish, it is actually feeding off the rest of the world. Government or public enterprise cannot behave like this, and works within a whole set of constraints

on the Negative developments:

1. What is the middle class? The consumptive class? The class that doesn't care and doesn't need to care about anything but itself? The class that wants to aquire more and become upper class? These are my views of the middle class, and in this context, I am grateful that it is slow to expand, as if it did any faster, it would wipe out the earth and it's resources very quickly.

2. Before we drive growth in the region, we must ensure that every citizen of India is above a certain level of poverty. The fact that our growth has neither done this nor driven growth in the region means that the wealth created from the growth is being concentrated in a few places / with few people only.

3. The state is unable to meet the demands made on it, as our systems are currently designed in such a way that effeciency depends on the state, with limited participation from the people, even in terms of a monetary contribution. The middle class and the rich make increasing demands on the state, while continuing to contribute little, whether in terms of taxes, or even maturity and responsibility as citizens.

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The RBI's actions and policies determine inflation and growth and hence your responses and views are important as inputs from citizens help shape and frame policy.

So do send your responses to letters@business-standard.com with a cc to info@karmayog.org

Regards
Vinay
www.karmayog.org - towards a better world

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